Answer By law4u team
Online false advertising is a growing concern in the digital marketplace, where businesses may make misleading claims about products or services to attract consumers. Under the Consumer Protection Act 2019 and the IT Act 2000, such deceptive practices are considered unfair trade practices, and violators can face penalties, fines, compensation claims, and legal action. Consumer awareness and reporting mechanisms help ensure accountability and protect buyer rights in the online ecosystem.
Penalties for Online False Advertising
Monetary Fines
- Under Section 74 of the Consumer Protection Act 2019, companies or individuals found guilty of misleading consumers through false advertising may face fines up to ₹10 lakh.
- Additional fines may apply for repeated violations.
Compensation to Consumers
- Consumer forums can order compensation to victims for financial losses, emotional distress, or inconvenience caused by deceptive advertisements.
- Compensation claims are separate from fines imposed on the advertiser.
Corrective Orders and Cease Notices
- Regulatory authorities may issue cease-and-desist orders requiring removal of false ads from websites, social media, and other digital platforms.
- Advertisers may be directed to publish corrective statements or refunds.
Legal Action and Criminal Liability
- Under the IT Act 2000, if false advertising involves fraud, hacking, phishing, or identity theft, violators may face criminal charges, including imprisonment and fines.
- Sections 66C (identity theft), 66D (cheating by impersonation), and 72 (breach of privacy) may apply depending on the nature of deception.
Action by E-Commerce Platforms
- Many platforms like Amazon, Flipkart, or Paytm may suspend or ban sellers engaging in false advertising, preventing further fraudulent activity.
- Sellers may also face permanent removal from listings or marketplaces.
How Consumers Can Report False Advertising
- File a complaint with the District, State, or National Consumer Dispute Redressal Commission citing misleading advertisement.
- Provide evidence: screenshots, website links, promotional emails, invoices, or transaction proofs.
- Report serious cyber-enabled false advertising to the National Cyber Crime Reporting Portal.
- Notify the Advertising Standards Council of India (ASCI) to address unethical marketing practices.
Consumer Safety Tips
- Always verify product claims and cross-check seller reputation before purchase.
- Avoid responding to ads promising unrealistic discounts or benefits.
- Maintain a record of online advertisements, emails, and promotional messages.
- Use secure payment methods and avoid sharing sensitive personal data on suspicious platforms.
Example
A consumer sees an online ad claiming a new smartphone is available at a 70% discount. They purchase it for ₹40,000, but the product is never delivered, and the website disappears.
Steps the consumer should take
- Take screenshots of the ad and save emails or messages.
- Collect payment receipts, transaction IDs, and bank statements.
- File a complaint with the District Consumer Dispute Redressal Commission under unfair trade practices.
- Report the incident to the National Cyber Crime Reporting Portal.
- Request a refund, compensation for loss, and corrective action against the advertiser.
- If the platform is registered with ASCI, file a complaint to alert authorities and prevent similar future ads.
